President Barack Obama and Education Secretary Arne Duncan, among others, discuss education reform at the United States Department of Education headquarters in Washington, DC.

To view this video full-size, click here. An archive of the complete event is available in Windows Media and Real formats here.

President Barack Obama is calling on states and districts to set higher standards for student achievement. In a speech delivered at the United States Department of Education headquarters in Washington, DC Friday, Obama highlighted some of the top reforms he thinks will help accomplish this and also announced $4.35 billion in competitive grants designed to help support innovative reform efforts.

During the presentation Friday, Obama and representatives from the United States Department of Education outlined the previously introduced Race to the Top Fund and announced that the program will award grants on a competitive basis. U.S. Secretary of Education Arne Duncan also announced the draft application for the program, and a Notice of Proposed Priorities, Requirements, Definitions, and Selection Criteria has been published in the Federal Register.

The Race to the Top Fund, announced in the first quarter of 2009, is designed to help states bolster student achievement through various reforms. It provides $4.35 billion in incentives for states to create "innovative programs" that can be replicated throughout the country.

"Because improving education is central to rebuilding our economy, we set aside over $4 billion in the Recovery Act to promote improvements in schools," Obama said. "This is one of the largest investments in education reform in American history. And rather than divvying it up and handing it out, we are letting states and school districts compete for it. That's how we can incentivize excellence and spur reform and launch a race to the top in America's public schools. That race starts today."

Among the key points in the Obama administration's "race to the top" strategy are performance-based incentives, data-driven decision making, and reforms to the manner in which student achievement is assessed. Obama indicated that reforms in these three areas could help bolster America's competitiveness globally while also helping to narrow the achievement gap between cultural groups within the nation's borders.

"America will not succeed in the 21st century unless we do a far better job of educating our sons and daughters," Obama said. "In an economy where knowledge is the most valuable commodity a person and a country have to offer, the best jobs will go to the best educated, whether they live in the United States or India or China. In a world where countries that out-educate us today will outcompete us tomorrow, the future belongs to the nation that best educates its people. Period. We know this. But we also know that, today, our education system is falling short. We've talked about it for decades, but we know we have not made the progress we need to make. The United States, a country that has always led the way in innovation, is now being outpaced in math and science education. African American [and] Latino students are lagging behind white classmates in one subject after another, an achievement gap that by one estimate costs us hundreds of billions of dollars in wages that will not be earned, jobs that will not be done, and purchases that will not be made. And most employers raise doubts about the qualifications of future employees, rating high school graduates' basic skills as only fair or poor."

He continued: "Of course, as I said before, we've talked about this problem for years. For years we've talked about bad statistics and an achievement gap. For years we've talked about overcrowded classrooms, crumbling schools, and corridors of shame across this country. We've talked these problems to death, year after year, decade after decade, while doing all too little to solve it. But ... that's beginning to change."

He said what the nation's education systems need is both reform and increased funding--not just one or the other. And he challenged leaders and stakeholders to embrace to make it happen by embracing some key "benchmarks" for reform.

"I'm issuing a challenge to our nation's governors, school boards and principals and teachers, to businesses and [not]-for-profits, to parents and to students: If you set and enforce rigorous and challenging standards and assessments, if you put outstanding teachers at the front of the classroom, if you turn around failing schools, your state can win a Race to the Top grant that will not only help students outcompete workers around the world but let them fulfill their God-given potential. This competition will not be based on politics or ideology or the preferences of a particular interest group. Instead it will be based on a simple principle: whether a state is ready to do what works. We will use the best evidence available to determine whether a state can meet a few key benchmarks for reform. And states that outperform the rest will be rewarded with a grant. Not every state will win. And not every school district will be happy with the results. But America's children and America's economy [and] America itself will be better for it."

These benchmarks, Obama indicated, include, among others:

Whether states are designing and enforcing high standards and assessments that are designed to prepare students for higher education and "life." Obama was quick to point out that he is not calling for more assessments like those employed under NCLB. "This is not about more tests," he said. "This is not about teaching to the test. And it's not about judging a teacher solely on the results of a single test." What it is about is still somewhat vague. Obama explained it this way: "It is about finally getting testing right, about developing thoughtful assessments that lead to better results, assessments that don't simply measure whether students can use a pencil to fill in a bubble but whether they possess basic knowledge and essential skills, like problem-solving and creative thinking, creativity, and entrepreneurship."

Whether "outstanding" teachers are being placed in classrooms. He said there's currently no good way of distinguishing "good teachers from bad ones." However, he said, this problem could be approached with more effective data systems, with student test scored being just one criterion among others for determining the effectiveness of a given teacher. "Success should be judged by results, and data is a powerful tool to determine results," he said. "That's why any state that makes it unlawful to link student progress to teacher evaluations will have to change its ways, if it wants to compete for a grant."

The phase 1 funding applications period is expected to open in late 2009, with grants awarded in "early 2010." Phase 2 applications will open in late spring 2010, with grants to be awarded in September 2010. Phase 1 funding recipients will be able to apply for additional funding in phase 2. Likewise, those who are denied funding in phase 1 will nevertheless be able to apply again during phase 2.

According to ED, the department will also announce later this year an additional $350 million competitive grant program to help reform state standards and assessments.

Further information about the Race to the Top Fund can be found on ED's site here.

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